D-amino acid oxidase ("DAO;" EC No. 1.4.3.3 ), which occurs widely in microorganisms as well as in tissues of animals, is known to be able to convert cephalosporin C ("Ceph C"), a D-.alpha.-amino acid, to .alpha.-ketoadipyl cephalosporanic acid (".alpha.-ketoadipyl 7-ACA") , hydrogen peroxide, and ammonia. .alpha.-ketoadipyl 7-ACA, upon reaction with hydrogen peroxide, can be further transformed into glutaryl-7-aminocephalosporanic acid ("GL-7-ACA"). Since GL-7-ACA is a starting material for the production of cephem antibiotics, DAO is of great industrial interest.